CONTRACTOR PRICING GUIDE
Markup vs. Margin for Contractors
A 30% markup does not create a 30% margin. That small vocabulary difference can create a very real pricing mistake.
Simple example
If a job costs you $1,000 and you add a 30% markup, the selling price is $1,300. The $300 left over is only about 23% of the $1,300 selling price. Margin is measured against selling price; markup is measured against cost.
Margin formula: (price − cost) ÷ price. Markup formula: (price − cost) ÷ cost.
Why contractors need more than a markup rule
A material markup alone does not tell you whether the job supports estimating time, travel, overhead, owner compensation or the hours that ran longer than expected. A better pricing decision starts with what the whole business needs and then checks each job against that target.
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